The legal blow comes two days after Rolling Stone’s publisher announced it would sell the legendary rock publication whose reputation is still marred by the article “A Rape on Campus,” which appeared online in November 2014 and then in the Dec. 4 print issue.

Recounting the supposed gang rape of a University of Virginia student identified only as Jackie, Rolling Stone writer Sabrina Erdely soon faced scrutiny over her reporting after Charlottesville police found Jackie’s claims unsubstantiated.

Rolling Stone retracted the piece after a number of news organizations began to poke holes in Erdely’s work. In addition to earning a spot in the Columbia Journalism Review’s list of “The Worst Journalism of 2014,” the article was criticized by the Poynter Institute as the “Error of the Year” in journalism.

Erdely never explicitly identified the Phi Kappa Psi fraternity members Jackie accused of attacking her, but George Elias IV, Stephen Hadford and Ross Fowler claimed in a federal complaint that the article offered enough clues to tarnish their reputations.

The former students squared off with Rolling Stone at the Second Circuit this past spring after a federal judge in Manhattan dismissed their case, calling the details about Jackie’s attackers “too vague and remote from the plaintiffs’ circumstances.”

Reversing Tuesday, a divided three-judge appeals panel found that all three men have a plausible claim under the theory of small-group defamation, “because a reader of the article could plausibly conclude that each member of Phi Kappa Psi was implicated either directly or indirectly in the alleged rapes.”

“The District Court erred by evaluating the article’s various allegations against Phi Kappa Psi in isolation, rather than considering them in the context of the article as a whole,” U.S. District Judge Katherine Forrest wrote for the majority, sitting by designation from the Southern District of New York. “Connecting the dots, a reader could plausibly conclude that Phi Kappa Psi had a long tradition of requiring pledges to participate in gang rapes as a condition of membership.”

U.S. Circuit Judge Jose Cabranes concurred in the majority opinion, which also revives Elias and Fowler’s individual claims, finding that the pair offered sufficient evidence that the Rolling Stone article was “of and concerning” them.

The small-group defamation claims stem from two lines in Erdely’s article that implicate Jackie’s supposed gang rape as part of initiation ritual or condition of fraternity membership. Erdely quoted fraternity members as egging each other on during the group assault: “Don’t you want to be a brother?” “We all had to do it, so you do, too.”

The lawsuit by Elias, Hadford and Fowler is one of multiple lawsuits Rolling Stone drew after publishing the 9,000-word article. Another suit by University of Virginia associate dean Nicole Eramo was settled midtrial for $1.65 million.

Elias, Hadford and Fowler also complained about statements Erdely made about the article in a podcast, but the Second Circuit affirmed dismissal of those claims because the reporter’s statements qualified as nonactionable opinion, rather than factual assertions.

“Although Erdely’s Podcast statements related to matters that could be proven or disproven, her remarks were readily identifiable as speculation and hypothesis,” Forrest wrote.

U.S. Circuit Judge Raymond Lohier wrote in a partial dissent that the small-group defamation should stay buried.

“The majority opinion now permits every Phi Kappa Psi fraternity member to hold Rolling Stone liable under New York defamation law for publishing an article even though it is a ‘close call’ that the only members arguably referenced in the article have a claim,” Lohier write. “Until this error is corrected by the New York Court of Appeals, publishers should beware.”

Lohier disputes that the small-group defamation theory could “survive even under our lenient plausibility standard.”

“Interpreting the article to mean that all members of the fraternity were either aware of or committed acts of rape warps the language beyond its plausible meaning and surrounding context,” he added.

Rolling Stone was represented by Elizabeth McNamara with Davis Wright Tremaine, a Washington firm that has not responded to requests for comment.